Director of Benefits, Orchard & Vine
Accepted answer
Take a range of 400,000 to 600,000 kronor with a midpoint of 500,000, and someone paid 460,000. Compa-ratio is pay divided by midpoint: 460,000 over 500,000 is 0.92. Range penetration is how far up the range they are: 60,000 above the minimum, out of a range 200,000 wide, so 30 per cent.
They answer different questions. Compa-ratio compares pay with the target rate for the job, so it works across grades. Penetration shows how much room is left before the maximum, which is what managers ask about at review time.
